County pushes sales tax vote

By Steve Estes

The final piece of the financing puzzle for the Cudjoe Regional Wastewater system will be in the hands of voters in Monroe County come Tuesday.

While about one-third of those eligible to vote in the general election have already done so, the bulk of folks will go to the polls Tuesday to make decisions on federal, state and local positions races.

But they will also be asked to make a decision on whether to extend a one-cent infrastructure sales tax for an additional 15 years.

It is the anticipated money from that tax the county hopes to use to pay off the last $40 to $50 million in anticipated costs for the construction of the Cudjoe Regional.

The sales tax has been in place for 22-plus years and has been used to partially fund several of the county’s central wastewater treatment systems, as well as the Key Largo system, Marathon and soon Islamorada.

It has also been used to build county facilities such as the Key Largo Community Park, the Big Coppitt Community Park, the Big Pine Community Park, fire stations in several locations throughout the Keys, the new terminal at Key West International Airport, the Murray Nelson Government Center in Key Largo and renovations of courthouses and other facilities.

The money was also used by a previous county commission to purchase the defunct Hickory House restaurant.

And that memory has made the tax a harder sell than it should have been, says County Administrator Roman Gastesi.

He says that the tax makes good sense for county residents because they get to use the money for needed infrastructure projects while more than half of it is paid by visitors.

“They use the ‘facilities’ while they’re here, it’s only fair they pay a fair share,” he said.

The tax is set to expire in 2018 and the county is asking for another 15 years to extend the tax to 2033.

Officials expect the tax to generate about $27 million per year in revenues. The distribution of the tax is set by population numbers so unincorporated Monroe County, which includes Key Largo, gets the lion’s share with smaller shares to the municipalities based on population numbers.

Gastesi says the county can expect $13 to $16 million yearly from its share.

“It’s important to remember that this isn’t a new tax,” said Gastesi. “This is an extension of a tax you’ve already been paying for more than two decades.”

The Cudjoe Regional is expected to cost some $150 million to complete, although officials hope that a continuing slow economic recovery will bring hungry bidders to the table and lower that estimate by as much as $20 million.

Users of the system have been assessed about $40 million in hook up fees, although there are appeals underway that might lower that number slightly.

The state has kicked in $30 million, and there is a chance it will kick in more in coming years, but hopes are slim at this point.

The county has managed to reserve about $20 million in current sales tax dollars to put toward the Cudjoe Regional, leaving somewhere between $40 and $60 million needed to complete construction of the plant.

The Florida Keys Aqueduct Authority will open bids for the first two phases of the project this week, giving officials some idea of the accuracy of their estimates. The final phase bids will be opened early next month.

But none of the bids will be awarded until everyone knows the outcome of the sales tax vote.

“Plan B isn’t pretty,” said County Mayor David Rice. “Plan B probably entails a property tax levy against every taxpayer in the county.”

The state has mandated that the sewer systems in the county be upgraded to improve near-shore water quality. And even though that mandate came with little money, it didn’t come with a caveat that it be ignored if money weren’t available.

Officials are concerned that the placement of the tax question on the ballot could cause some issues for local voters. The ballot is four sheets long with eight pages. The tax question is the next-to-last item for county voters, the first one on the final page for everyone else, on the final page of the ballot.

“My suggestion is that you turn the ballot over, vote the tax question and then go back to the beginning so you don’t get bogged down in those 11 Constitutional Amendments,” said Rice.

As part of the ordinance that will govern spending of the sales tax money, the county has agreed that only wastewater will be funded until it is complete, and then the money can be used for other purposes.

One of those purposes a few years down the road is to bite into a backlog of road and bridge projects that county officials estimate at more than $30 million, says Rice.

“Gas tax isn’t doing the job for the road fund in recent years. Gas prices are up, mileage rates are up, and people are buying less gas. We get five cents per gallon, not five cents per dollar. That revenue can’t keep up with road projects,” he said.

Taxing districts throughout Monroe County have endorsed passage of the sales tax extension, as has the Key Largo Wastewater Treatment District.

The district and county have been working on a memorandum of understanding that would allow up to 10 percent of the tax proceeds to go toward reducing the debt load of the district that is currently paid by users in a capital component on their monthly bills.

But there are still those who remember the glory days of the “Gang of Three” and their blatant disregard for wastewater costs by purchasing Hickory House, sinking the Vandenberg, and paying for other smaller pork projects when money was flush.

“We have to fight that perception, but we have a good county commission in place right now that thinks long term and the best interests of everyone,” said Gastesi.

The tax passed by a sizeable margin the last time it was on the ballot even though it wasn’t supported by much of the Upper Keys.

“If there is anyone in the Cudjoe Regional service area that votes against the tax, they may as well just pull out their wallet and throw it in the street because that’s what they’ll be doing with free money from the tourists,” said County Commissioner George Neugent, whose district encompasses all of the planned Cudjoe Regional service area.

Should the tax not pass this year, the county will have one more shot at an extension prior to the Dec. 31, 2015 deadline to have sewers in place in the Keys. That would be the general election in 2014.

But officials say they need passage this time because moving forward on Cudjoe Regional by the deadline is contingent on an identified revenue stream to pay off money that will have to be borrowed to build the facility.

“The state isn’t going to let us walk away from that $30 million. We have a deadline we have to meet,” said Neugent.